Entrepreneurship can take a variety of forms and a number of researchers have suggested that it is important to recognize different “types” of entrepreneurship when analyzing issues such as the characteristics of entrepreneurs, their motives for choosing entrepreneurship and the contributions of their entrepreneurial activities to economic development. The GEM researchers acknowledged that entrepreneurship is a process that extends over multiple phases, thus allowing opportunities for assessing the state of entrepreneurship in a particular society at different phases. Four of the phases are readily identifiable stages of the new venture formation process and each stage has its own “type” of entrepreneur:
- Potential entrepreneurs: These are persons who see opportunities in their areas, believe they have the abilities and resources to start businesses to pursue those opportunities and who are not deterred by fear of failure in pursuing those opportunities. The level of broader societal support for entrepreneurship is also important at this phase. The GEM survey uses a variety of measures of entrepreneurial perceptions, intentions and societal attitudes including perceived opportunities, perceived capabilities, fear of failure, entrepreneurial intentions, entrepreneurship as a “good career choice” high status to successful entrepreneurs and media attention for entrepreneurship.
- Expected entrepreneurs: Expected entrepreneurs are those persons who have not yet started a business but who have expressed an expectation that they would start a business within the next three years.
- Nascent entrepreneurs: This phase covers the first three months after the entrepreneur establishes a new business to pursue the identified opportunities.
- New business owners: These are persons who have successfully emerged from the nascent phase and have been in business more than three months but less than three and one-half years.
Two other popular methods for classifying entrepreneurs are the distinctions that have been made between “push” and “pull” entrepreneurs and the distinctions between “necessity-based” and “opportunity-based” entrepreneurs. Others, when analyzing conditions in transition economies, have distinguished between “proprietorship”, which includes situations where individuals start their own businesses to generate income to sustain their families when no other options are available, and “genuine entrepreneurship”, which is a term that describes situations where individuals start businesses with the goal of generating sufficient income so that a portion of it can be reinvested in order to underwrite business growth and development.
A number of researchers have focused on the existence and influence of “push/pull situational factors” in motivating individuals to engage in entrepreneurial activities and the factors identified have included the frustration of the entrepreneur with his or her current lifestyle, childhood influences, family environment, age, education, work history, role models and support networks. In many instances, entrepreneurs may be literally “pushed” into entrepreneurship, often against their wishes, by unanticipated and unwelcome lifecycle developments such as loss of employment, extreme dissatisfaction with a current job and other career setbacks. Unfortunately, these entrepreneurs are frequently viewed in a somewhat negative fashion by society—“misfits” or “rejects”. On the other hand, entrepreneurs may be “pulled” into creating a new venture by factors viewed more positively in most societies including training and exposure to business that creates interest and confidence in looking for new opportunities to exploit. Some researchers have viewed either a “push” or a “pull” as a prerequisite to new venture formation since it triggers a state of general readiness to take action once a suitable opportunity and the necessary resources can be identified.
The terms “opportunity-based” and “necessity-based” entrepreneurship have been popularized by their use in the GEM. The questions asked of entrepreneurs included seeking information about why they decided to start and grow their businesses. Respondents who indicated that they chose entrepreneurship to “take advantage of a business opportunity” or “seek better opportunities” were practicing opportunity-based entrepreneurship while respondents starting businesses “because [they had] no better choices for work” were identified as necessity-based entrepreneurs. The key characteristic among opportunity-based entrepreneurs is their acknowledgement that they made a voluntary career choice to pursue an entrepreneurial path. The GEM also recognizes another type of entrepreneurship, referred to as “improvement-driven”, that includes persons interested in pursuing an opportunity and who do so in order to improve their incomes and/or independence in their work, as opposed to “necessity”.
In contrast, necessity-based entrepreneurs choose entrepreneurship only because other options were not available or were considered to be unsatisfactory. The term “reluctant entrepreneurship” is sometimes used to describe these persons and it is common to find that they have been pushed to start their own businesses because they have either lost the jobs they had with their employers or had been placed in the path of what appears to be an inevitable elimination of their positions. In either instance, entrepreneurship was, at least initially, a means of survival. It should be noted, however, that there appears to be some debate about whether problems in the overall economy that lead to increased unemployment will lead to higher levels of necessity-based entrepreneurship and one researcher has summarized the findings of various researchers as follows: “It does seem then that there is some disagreement in the literature on whether high unemployment acts to discourage self-employment because of the lack of available opportunities or encourage it because of the lack of viable alternatives.”
The GEM research confirms that it is more likely than not that persons start a new business in order to take advantage of a perceived business opportunity, so-called “opportunity entrepreneurship”; however, the existence of “necessity entrepreneurship” must be acknowledged and considered when researching entrepreneurship. It is not surprising to find that there are differences among countries, particularly groups of countries with similar cultural characteristics, with regard to the prevalence of specific types of entrepreneurs. For example, differences between countries with respect to the incidence of entrepreneurial activity have been attributed to differences in “risk tolerance” since there are significant variations among countries with respect to the level of risk (and possibility of failure) that persons are willing to assume before they start a new business. Even within countries, however, variations in the incidence of entrepreneurial activity can be seen when one looks at different characteristics such as age, education, industry and location. Several studies have confirmed what would appear to be fairly obvious: necessity-based entrepreneurship in a country tends to decline as the level of economic development in that country increases and the overall business environment in the country stabilizes. In addition, one sees lower levels of necessity-based entrepreneurship in “innovation-driven countries”.
There has been a good deal of research on the relationship between the motives and reasons of the entrepreneur for embarking on a business activity and the subsequent performance (i.e., “success”) of the entrepreneur’s business venture. Predictably, the findings appear to be mixed. In some instances, researchers have claimed that there is a positive relationship between the intentions of the entrepreneur and the growth realized by the entrepreneurial activity, at least when the relevant measure is employment growth; however, when reporting their results the researchers have also cautioned that the entrepreneur’s intention to grow, while relevant, is not the only factor that influences the performance of the entrepreneurial activities and that one needs to take into account other factors such as the availability of resources. A number of researchers using data from the GEM have found that while necessity-based entrepreneurs create jobs for themselves, they generally do not contribute to economic growth and, in fact, one scholar looking at the research work in the area has concluded that “[i]n general, studies based on GEM data (citations omitted) tend to view so-called necessity entrepreneurship as a more negative factor as far as national growth and development are concerned”. On the other hand, different studies have concluded that the initial reasons for launching a new business are not reliable indicators of whether the business will survive and, if it does, the size and/or rate of growth of the business. Those studies emphasize that the likelihood of success for an entrepreneur will be impacted by a number of other factors apart from the reasons for launching a new business such as the availability of capital and skilled personnel, governmental policies and the communications and transportation infrastructure.
Welter acknowledged the utility of a dichotomy of concepts pertaining to the motivations for entrepreneurship such as “push/pull” and “opportunity” versus “necessity” entrepreneurship and the concepts of “productive” and “unproductive” entrepreneurship; however, he argued that one should avoid categorizing or otherwise describing ventures once and for all into a single category into order to assess their contribution to economic development at the macro level. According to Welter, entrepreneurship must be seen as a “dynamic phenomenon” which is fluid and individual entrepreneurs bring their own previous experience and other antecedent influences to the process of launching a new business. As such, it can be expected that the motivations, behaviors and contributions of an entrepreneur may change over time. For example, a person may begin down the path of entrepreneurship driven primarily by the desire to simply “survive”, even though he or she may harbor personal ambitions and strategies to pursue “genuine” entrepreneurship at some point in the future once the immediate basic needs for self and family have been meant. In the same vein, temporary “unproductive” behavior, such as acting informally for a time to evade legal and tax requirements that would make it too difficult to launch the business at all, may eventually give way to a “productive” venture that makes a substantial contribution to job creation and tax revenues for the state. Welter pressed for recognition that a multitude of motivations and entrepreneurial behaviors may exist over the life of a particular venture and that the productivity of a particular venture should be measured by taking into account both output and behavior.
Wagner was especially interested in gaining a better understanding of persons falling within the definition of “nascent entrepreneurs”, which Wagner explained by referencing a suggested model for the process of creating a new venture which included four stages (conception, gestation, infancy and adolescence) and the three transitions between those stages. In Wagner’s words: “The first transition begins when one or more persons start to commit time and resources to founding a new firm. If they do so on their own, and if the new venture can be considered as an independent start-up, they are called nascent entrepreneurs. The second transition occurs when the gestation process is complete, and when the new venture either starts as an operating business, or when the nascent entrepreneurs abandon their effort and a stillborn happens. The third transition is the passage from infancy to adolescence–the fledgling new firm’s successful shift to an established new firm.” Wagner’s view was that nascent entrepreneurs were important due to their roles as the main actors in the first two stages and transitions of the new venture creation process and that he was not, at least for purposes of that particular analysis, interested in what happened to businesses that were formed after the second transition or in persons who had gone through the first two stages and transitions because they preferred being self-employed over being an employee but were not that interested in trying to start and own a whole new business (i.e., persons commonly referred to as “latent entrepreneurs”).
Wagner’s paper covered several fundamental questions about nascent entrepreneurship, collecting and analyzing data from various sources on each of the questions: how many nascent entrepreneurs are there, around the world; what do nascent entrepreneurs do; who are the nascent entrepreneurs; what makes a nascent entrepreneur; and what happens to nascent entrepreneurs and why? He noted that information on these questions had improved substantially with the launch and development of the GEM, which incorporates reliable information on the prevalence of nascent entrepreneurship in a large number of countries; however, he felt that much work still needed to be done in order to understand the substantial differences between countries with respect to the percentage of adults engaged in nascent entrepreneurship and understand why people decide to become nascent entrepreneurs, what activities they engage in once they do and what factors are most important in helping them push forward into the later stages of the new venture creation process.
Wagner bemoaned the fact that there was no “comprehensive and comparable evidence on the set of activities nascent entrepreneurs are involved in, and on the timing of these events, for a large number of countries”. A few studies were conducted in the US, Norway and Canada in the 1990s and early 2000s and the most common responses by survey participants regarding their activities included “spending a lot of time thinking about starting a business”, taking classes or workshops on starting a new business, saving money to invest in a new business and/or investing personal funds in a new business and developing a model or prototype for the first product or service. Other actions included writing an initial business plan, purchasing facilities and/or equipment, seeking financial support, applying for permits and/or patents and organizing a start-up management team. Almost all of the nascent entrepreneurs canvassed in these surveys engaged in two or more activities and the medium number of actions taken was seven.
Wagner reported that a study of nascent entrepreneurship in the US conducted by Kim, Aldrich and Keister found that while financial resources were not significantly associated with becoming a nascent entrepreneur, there were positive relationships between the probability of becoming a nascent entrepreneur and several human capital variables such as level of education, full-time work experience, previous start-up experience, current self-employment, and the percentage of relatives who are entrepreneurs. Information collected in 2001 from 29 countries that participated in the GEM survey for that year indicated that higher prevalence of nascent entrepreneurship among people with certain personal characteristics and attitudes including being male and younger, knowing an entrepreneur, perceiving a good opportunity for business, having business skills, not being overly fearful of business failure, having higher household income and feeling good about the future security of the family.
For example, Wagner found relatively meager assessment of how nascent entrepreneurs fared in their efforts—did they move forward or did they stop and, if so, why—expressed particular concerns about fundamental methodology issues such as the time frame for follow up and the specification for empirical models of new venture creation process. The studies available at the time that Wagner wrote his paper were primarily from the US and among the persons evaluated in those studies one third to one half of them move forward to become “infant entrepreneurs” within a year following the point where they were first survey. A number of the nascent entrepreneurs concluded that their ideas were not viable and among those who had identified a viable business opportunity the responses indicated that the ones who “were more aggressive in making their business real, acting with a greater level of intensity, and undertaking more activities” were the nascent entrepreneurs most like to actually launch a business. In general, however, it was difficult to find a significant and consistent relationship between personal characteristics of the nascent entrepreneurs and the ultimate outcome with respect to creation of new businesses.
 See, e.g., W. Baumol, “Entrepreneurship – Productive, Unproductive and Destructive”, Journal of Political Economy, 98(5) (1990), 893-921.
 D. Kelley, S. Singer and M. Herrington, Global Entrepreneurship Monitor: 2011 Global Report (Babson Park, MA: Global Entrepreneurship Research Association, 2012). The GEM researchers actually identified six phases; the four mentioned in the text and two more: “established businesses” (i.e., businesses that have been operating for more than three and one-half years, thus moving beyond “new business owner” status) and “discontinued businesses”, which were factored into the analysis regardless of how long they were operating because they are a source of experienced entrepreneurs who may start new businesses and/or use their expertise and experience to support other entrepreneurs (e.g., by providing financing and/or business advice).
 See, e.g., R. Amit and E. Muller, “’Push’ and ‘Pull’ Entrepreneurship”, Journal of Small Business and Entrepreneurship, 12(4) (1995), 64-80.
 R. Scase, “The Role of Small Businesses in the Economic Transformation of Eastern Europe: Real but Relatively Unimportant” International Small Business Journal, 16 (1997), 113-121; R. Scase, “Entrepreneurship and proprietorship in transition: policy implications for the SME sector”, in R. McIntyre, R. Dallago and B. Houndsmill (Eds.) Small and Medium Enterprises in Transitional Economies` (Basingstoke: Palgrave Macmillan, 2003), 64-77.
 S. Mueller and A. Thomas, “Culture and Entrepreneurial Potential: A Nine Country Study of Locus of Control and Innovativeness”, Journal of Business Venturing, 16 (2000), 51-75, 54 (citing R. Hisrich, “Entrepreneurship/intrapreneurship”, American Psychologist, 45(2) (1990), 209–222; M. Martin, Managing technological innovation and entrepreneurship (Reston, VA: Prentice-Hall, 1984); C. Moore, Understanding entrepreneurial behavior: A definition and model (Proceeding of the National Academy of Management, 1986), 66–70; N. Krueger, “The impact of prior entrepreneurial exposure on perceptions of new venture feasibility and desirability”, Entrepreneurship Theory and Practice, 18(1) (1993), 5–21; S. Scheinberg and I. MacMillan, “An eleven country study of the motivations to start a business” in B. Kirchhoff, W. Long, W. McMullan, K.H. Vesper and W. Wetzel (Eds.), Frontiers of entrepreneurship research (Wellesley, MA: Babson College, 1988)).
 R. Brockhaus, “The effect of job dissatisfaction on the decision to start a business”, Journal of Small Business Management, 18(1) (1980), 37–43; A. Shapero, “The displaced, uncomfortable entrepreneur”, Psychology Today, 9(6) (1975), 83–88; M. Kets de Vries, “The entrepreneurial personality: A person at the crossroads”, Journal of Management Studies, 14(1) (1977), 34–57; B. Gilad and P. Levine, “A behavioral model of entrepreneurial supply”, Journal of Small Business Management, 24(4) (1986), 44–53.
 N. Krueger, “The impact of prior entrepreneurial exposure on perceptions of new venture feasibility and desirability”, Entrepreneurship Theory and Practice, 18(1) (1993), 5–21; J. Mancuso, Fun and guts: The entrepreneur’s philosophy (Reading, MA: Addison-Wesley, 1973); B. Gilad and P. Levine, “A behavioral model of entrepreneurial supply”, Journal of Small Business Management, 24(4) (1986), 44–53; S. Scheinberg and I. MacMillan, “An eleven country study of the motivations to start a business” in B. Kirchhoff, W. Long, W. McMullan, K.H. Vesper and W. Wetzel (Eds.), Frontiers of entrepreneurship research (Wellesley, MA: Babson College, 1988).
 See also A. Shapero, “The displaced, uncomfortable entrepreneur”, Psychology Today, 9(6) (1975), 83–88.
 For further discussion of the GEM surveys, see “Research on Entrepreneurship” in “Entrepreneurship: A Library of Resources for Sustainable Entrepreneurs” prepared and distributed by the Sustainable Entrepreneurship Project (www.seproject.org).
 For further discussion, see P. Reynolds, W. Bygrave, E. Autio, L. Cox and M. Hay, Global Entrepreneurship Monitor: 2002 Executive Report (London: Global Entrepreneurship Monitor, 2002), 12.
 D. Blanchflower, Self-Employment: More May Not Be Better (Cambridge MA: National Bureau of Economic Research, 2004).
 See, e.g., N. Bosma and J. Levie, Global Entrepreneurship Monitor: 2009 Global Executive Report (London: Global Entrepreneurship Monitor, 2010).
 J. Dahlqvist, P. Davidsson, and J. Wiklund, “Initial Conditions as Predictors of New Venture Performance: A Replication and Extension of the Cooper et al.study,” Enterprise and Innovation Management Studies, 1(1) (2000); F. Delmar and J. Wiklund, “The effect of small business managers’ growth motivation on firm growth: A longitudinal study”, Entrepreneurship Theory and Practice, 32(3) (2008), 437-457; and J. Wiklund and D. Shepherd, “Aspiring for, and achieving growth: The moderating role of resources and opportunities”, Journal of Management Studies, 40(8) (2003), 1919-1941. Motives and goals have not been the only factor considered in these studies and researchers have also looked at other characteristics of entrepreneurs to see whether they might be accurate predictors of distinctive entrepreneurial behavior, including an orientation toward pursuing and achieving growth for their entrepreneurial businesses. See, e.g., A. Cooper and W. Dunkelberg, “Entrepreneurship and Paths to Business Ownership”, Strategic Management Journal, 7(1) (1986), 53-68; and M. Stanworth and J. Curran, “Growth and Small Firm – Alternative View”, Journal of Management Studies, 13(2) (1976), 95-110.
 F. Delmar and J. Wiklund, “The effect of small business managers’ growth motivation on firm growth: A longitudinal study”, Entrepreneurship Theory and Practice, 32(3) (2008), 437-457.
 A. Van Stel and D. Storey, “The link between firm births and job creation: Is there a Upas tree effect?”, Regional Studies, 38(8) (2004), 893-909.
 F. Welter, “Entrepreneurship and development—Do we really know which entrepreneurship types contribute (most)?” Strategic Entrepreneurship—The Promise for Future Entrepreneurship, Family Business and SME Research?, Papers presented to the Beitrage zu den Rencontres de St-Gall 2010 (St. Gallen: KMU-Verlag HSG, 2010) (citing Z. Acs and A. Varga, “Entrepreneurship, agglomeration and technological change”, Small Business Economics, 24(3) (2005), 323-334; S. Wennekers, A. van Stel, R. Thurik and P. Reynolds, “Nascent entrepreneurship and the level of economic development”, Small Business Economics, 24(3) (2005), 293-309; and P. Wong, Y. Ho and E. Autio, “Entrepreneurship, innovation and economic growth: Evidence from GEM data” Small Business Economics, 24 (3) (2005), 335-350).
 J. Dahlqvist, P. Davidsson, and J. Wiklund, “Initial Conditions as Predictors of New Venture Performance: A Replication and Extension of the Cooper et al.study,” Enterprise and Innovation Management Studies, 1(1) (2000); and E. Solymossy, “Push/pull motivation: Does it matter in venture performance?”, in P. Reynolds, W. Bygrave, N. Carter, P. Davidsson, W. Gartner, C. Mason and P. McDougall (Eds.), Frontiers of Entrepreneurship Research 1997, (Wellesley: Babson College, 1997), 204-217.
 F. Welter, Entrepreneurship and Development – Do We Really Know Which Entrepreneurship Types Contribute (Most)?
 See A. Sauka and F. Welter, “Productive, unproductive and destructive entrepreneurship in an advanced transition setting: The example of Latvian small enterprises”, Empirical Entrepreneur (2007), 9.
 The Panel Study of Entrepreneurial Dynamics (“PSED”) and the Global Entrepreneurship Monitor (GEM) both referred to a “nascent entrepreneur”, a term that was defined as “a person who is now trying to start a new business, who expects to be the owner or part owner of the new firm, who has been active in trying to start the new firm in the past 12 month, and whose start-up did not have a positive monthly cash flow that covers expenses and the owner-manager salaries for more than three months” [quoted from Wagner paper referred to in following note (citations omitted)].
 J. Wagner, Nascent Entrepreneurs, Institute for the Study of Labor, Bonn, Discussion Paper No. 1293 (September 2004). See P. Reynolds and S. White, The Entrepreneurial Process: Economic Growth, Men, Women, and Minorities (Westport, Connecticut and London: Quorum Books, 1997), 6; and. P. Reynolds, “National panel study of U.S. business startups: Background and methodology” in J. Katz (Ed.), Data bases for the study of entrepreneurship (Advances in entrepreneurship, firm emergence, and growth, Volume 4) (Amsterdam etc.: JAI, 2000), 153, 158ff.
 Wisconsin Entrepreneurial Climate Study conducted in Spring 1993 in a national pilot study for the U.S. done in October/November 1993 (P. Reynolds, “Who Starts New Firms? – Preliminary Explorations of Firms-in-Gestation”, Small Business Economics 9 (1997), 449; P. Reynolds and S. White, The Entrepreneurial Process: Economic Growth, Men, Women, and Minorities (Westport, Connecticut and London: Quorum Books, 1997)), and in the Panel Study of Entrepreneurial Dynamics (PSED) that started in 1998 (P. Reynolds, “National panel study of U.S. business startups: Background and methodology” in J. Katz (Ed.), Data bases for the study of entrepreneurship (Advances in entrepreneurship, firm emergence, and growth, Volume 4) (Amsterdam etc.: JAI, 2000), 153; P. Reynolds, N. Carter, W. Gartner, P. Greene and L. Cox, The Entrepreneur next door: Characteristics of Individuals Starting Companies in America. An Executive Summary of the Panel Study of Entrepreneurial Dynamics (Kansas City, Missouri: Ewing Marion Kauffman Foundation, 2002); W. Gartner and N. Carter, “Entrepreneurial Behavior and Firm Organizing Processes” in Z. Acs and D. Audret (Eds.), Handbook of Entrepreneurship Research (International Handbook Series on Entrepreneurship, Volume 1) (Boston MA: Kluwer Academic Publishers, 2003), 195-221; P. Reynolds, N. Carter, W. Gartner and P. Greene, “The Prevalence of Nascent Entrepreneurs in the United States: Evidence from the Panel Study of Entrepreneurial Dynamics”, Small Business Economics 23 (2004), 263). Wagner also noted additional evidence from surveys conducted in Norway (G. Alsos and E. Ljunggren, Does the Business Start-Up Process Differ by Gender?: A Longitudinal Study of Nascent Entrepreneurs (Frontiers of Entrepreneurship Research) (Wellesley, MA: Babson College, 1998)) and in Canada (M. Diochon, Y. Gasse, T. Menzies and D. Garand, “From conception to inception: Initial findings from the Canadian Study on Entrepreneurial Emergence”, Proceedings of the Administrative Science Association of Canada, Entrepreneurship Division, London, Ontario, Volume 22 (21), 41-51. May 26-29, 2001).
 P. Kim, H. Aldrich and L. Keister, “If I Where Rich? The Impact of Financial and Human Capital on Becoming a Nascent Entrepreneur”, University of North Carolina at Chapel Hill and Ohio State University (draft mimeo, January 2003). See also F. Delmar and P. Davidsson, “Where do they come from? Prevalence and characteristics of nascent entrepreneurs”, Entrepreneurship and Regional Development, 12 (2000), 1 (analyzing data from Sweden using an approach similar to that adopted by P. Reynolds and S. White, The Entrepreneurial Process: Economic Growth, Men, Women, and Minorities (Westport, Connecticut and London: Quorum Books, 1997) and P. Reynolds, “Who Starts New Firms? – Preliminary Explorations of Firms-in-Gestation”, Small Business Economics 9 (1997), 449) and finding a negative impact of age, and positive effects of being male, having self-employed parents, education, being self-employed, and having experience in management).
 P. Reynolds, S. Camp, W. Bygrave, E. Autio and M. Hay, Global Entrepreneurship Monitor 2001 Summary Report (London Business School and Babson College, 2001), 32.
 See e.g., N. Carter, W. Gartner and P. Reynolds, “Exploring Start-up Event Sequences”, Journal of Business Venturing, 11 (1996), 151 and P. Reynolds and S. White, The Entrepreneurial Process: Economic Growth, Men, Women, and Minorities (Westport, Connecticut and London: Quorum Books, 1997), Chapter 4.